Has Chris Grayling just entered negotiations for a second coalition between Conservatives and Liberal Democrats?

Last week the Lib Dem conference in Glasgow was all about what that smaller party would want as its price for supporting a larger partner after 2015. Top of the Lib Dem list was tax rises.

The starting point for this is a deficit that will be with us until at least 2018. That means more fiscal consolidation, a posh way of saying the Government will have to squeeze even more cash out of the UK by either taxing more or spending less.

George Osborne has said that an all Conservative government would want to do it all through cuts. In other words, no new taxes.

The Lib Dems think that would cripple some parts of the State,so some tax rises should be part of the mix. Those taxes should hit the richest, they say. Some Lib Dems say that's a precondition for any power sharing deal in the next Parliament, a precondition know as a "red line".

So, what do Labour want? To penalise the wealth creators. Higher taxes for the rich. To pay for what Labour really desires – an ever bigger welfare state. The Lib Dems do, too. One of the big themes of last week’s conference was higher taxes. They too want to penalise the wealth creators. Both say it’s a red line for any future government.
Conservatives want to support wealth and job creators. That’s a red line for us.

That looks rather like an insistence that the Tories should not sign up to any new coalition deal that includes taxes on business.

That may not be too surprising. What is surprising is that Mr Grayling is prepared to say such things in public. It is well known that Conservatives of all sorts are – sensibly – war-gaming and scenario-planning for another hung Parliament, and potentially another coalition. But the first rule of Conservative coalition planning is: there is no Conservative coalition planning. Planning may be sensible, but No 10 worries that being seen to plan for a possible eventuality will be seen as hoping that eventuality is realised.

More than a few of David Cameron's colleagues suspect he'd be happier with another coalition than he would with a wafer-thin Tory majority that would lave him dependent on Peter Bone and friends on a daily basis. In another hung parliament, some Tories, especially on the Right, would rather try to govern alone without a majority than get back into bed with Nick Clegg's mob. One way to ensure that happens is to make it impossible for the two sides to agree policies, especially on big stuff like the economy. Some Tories note fretfully that M Cameron has been more circumspect on future taxes than Mr Osborne

Mr Grayling is a leading figure on the Tory Right. His "red line" on tax should be studied carefully, and taken seriously. It may just have a role in determining the form of Britain's next government.